Individual Employment Agreement – Must Haves!

Employers must provide all their employees with an employment agreement before they start work. The employment agreement forms the foundation of the employment relationship and creates the baseline for expectations and entitlements.

Employment agreements may contain such terms and conditions as the employer and employee think fit. There are many different types of clauses that employment agreements can contain. However, the law requires that employment agreements must be in writing and must include the following:

1. The names of the employee and employer concerned;

2. A description of the work to be performed by the employee;

3. An indication of where the employee is to perform the work;

4. Any agreed hours of work specified or, if no hours of work are agreed, an indication of the arrangements relating to the times the employee is to work;

5. The wages or salary payable to the employee; and

6. A plain language explanation of the services available for the resolution of employment relationship problems, including a reference to the period of 90 days, within which a personal grievance must be raised.

The above requirements are only the minimum requirements. An employer is fully within their right to include additional terms as they see fit. Since the changes to the Employment Relations Act 2000 (“Act”) on 6 May 2019, there have been changes to trial period provisions, rest and meal breaks and the “30-day rule”, just to name a few. It is best practice for employers to keep on top of these changes and update their employment agreement templates accordingly. In some cases, it is advisable to update the employment agreements of existing employees to keep up to date with legislation. It is of utmost importance that employment agreements do not contain anything that is contrary to the law or inconsistent with the Act.

For employees, we understand the excitement of starting a new job and eagerly signing ‘the paperwork’ without delay. However, we advise potential employees to take the agreement away and consult with an employment law expert to ensure they are protected and fully understand their legal obligations.

Similarly, we encourage employers to regularly check the employment agreements they are issuing to new employees and ensure they are air-tight, compliant with the Act and have well reasoned clauses which the employer can rely on if unfortunate situations arise during the employment relationship or beyond. It is the employer’s responsibility to also ensure their employees receive the correct type of employment agreement: permanent, fixed-term or casual. Failure to do so could potentially result in an employee bringing an action against their employer by raising a personal grievance.

Common practice, though not a legal requirement, involves employers creating “policies” that specifically provide further information to their employees about expectations and requirements. In most cases, policies can change and evolve according to the needs of the employer, without the need to update employee’s employment agreements each time there is a change.

Should an employer fail to comply with the abovementioned criteria, the Labour Inspector could potentially bring an action against them which could result in a penalty imposed by the Employment Relations Authority.

Our employment experts provide assistance to both employees and employers on all matters employment referred to in this article.

Workplace Law Team

If you have any queries in respect of the above, or any other workplace law issues, please contact a member of Lane Neave’s Workplace Law Team: